Success in personal finance isn’t a cake walk. It takes hard work, but in the end it’s all worth it when you have the freedom to not worry about money. In order to get to that point of bliss here are 5 essential things that you’ll need.
If you don’t know where your money is going you’ll never be able to control it. A budget will help you to tame your money. There are many different ways to set a budget up, so be sure to find what works for you. I prefer the Zero Based Budget, but I think I might dabble in this budget I saw @PunchDebt . As situations change and you feel like your budget isn’t working for you then change it, but be sure you have one.
What are you going to do when your car breaks down, or you fall and break your leg in two places? If you don’t have a fund for that emergency then you’re not going to be very successful at paying those bills. So what you need to have is an Emergency Fund. The best place to have it is an account you don’t have immediate access, but doesn’t take too long to get. I keep mine in an ING savings account because I’m able to set up a sub account just for it and they have a nice rate of return.
When I retire I want to have the freedom to do what ever I want, when I want. That’s why I have a 401k and contribute to it every paycheck. I also get a nice match from the company I work for, so that’s helping my dream come true. If you’re not putting away money towards your 401k every chance you get then you’re missing out on boatload of money. When you contribute to your 401k it’s with pretax money. That brings down your total income and decreases the amount of taxes you pay. Also, you have time on your side working to compound that money into millions. Take a look at this scientific chart I made.
The world changes every day. There are new strategies/ways of doing things every day. That goes for personal finance as well. If you stay on top of things and expand your knowledge then you will be successful. I love to read books and that’s a great way to learn. A great to read up on what’s new is by surfing the web and reading blogs like mine. Make it a habit of learning something new every day.
Things take time to build up. You’re most likely not going to become a millionaire overnight, but overtime you can become one. Trying to take control of your finances in the beginning isn’t easy but if you have the patience to stay with it you will succeed. Remember:
“Patience is the greatest of all virtues”
If you have these five personal finance essentials you will succeed in your journey of personal finance.
P.S. Some of the links in this post I earn a little bit of money from, in order to pay my bills. But I promise to never to intentionally lead you to a bad company and to never let the money affect my opinion.
Tell me about your success in personal finance. Which of these essentials helped you the most to succeed?